Justia Trusts & Estates Opinion Summaries

In 2007, the remainder beneficiaries of two testamentary trusts sued defendant Bank of America for its actions as trustee from 1991 through 2003. The beneficiaries alleged that the Bank had invested trust assets in an unproductive commercial building in direct violation of express trust provisions and had thereby caused the loss of trust value in breach of its duty of care. The beneficiaries also alleged that, as part of this investment, the Bank arranged loans to the trust from its own affiliates that were secured by mortgages on the building and collected loan fees and mortgage interest from the trust in breach of its duty of loyalty. The New Mexico Uniform Trust Code provided that when a trustee breaches its duty of care and causes a loss to the trust, that lost value must be returned to the trust as restoration damages. It also provided that when a trustee breaches its duty of loyalty by self-dealing, any profit from such self-dealing must be disgorged so that the trustee cannot profit from its wrongdoing. "Restoration and disgorgement are not mutually exclusive, and recovery need not be limited to the amount of a beneficiary’s loss if more is required to ensure that both remedial goals are met." Because it was unclear whether the principles of disgorgement and restoration have both been satisfied in this case, the Supreme Court remanded to the district court to determine whether the profit wrongfully earned by the trustee was included in the restoration award to the beneficiary. View "Miller v. Bank of America" on Justia Law

At issue in this case was whether, and to what extent, the Colorado Probate Code displaced a probate court's authority to award an equitable adjustment supplementing a spouse's elective share of the decedent's estate. By the date of final distribution of the estate at the heart of this case, it had grown in value from $73 million to more than $250 million. Concluding that it would be unfair for the elective share to be "frozen in time" while extensive litigation concerning its computation eroded its value in relation to the appreciating estate, the probate court exercised its equitable authority by supplementing the elective share. The probate court determined that the spouse was entitled to an elective share of approximately $26 million, plus an equitable award of approximately $24.5 million, based on a17.46% rate of return on the undistributed balance of her elective share, calculated to reflect appreciation and income to the entire estate. The court of appeals reversed the trial court's decision, ruling that the Probate Code displaced a court's equitable powers in the elective-share arena as a matter of law. The court of appeals ordered the spouse to repay the entire $24.5 million equitable award, plus restitutionary interest from the date of distribution. Reading the elective-share statutes together with the probate court's equitable authority, the Supreme Court concluded that the Colorado Probate Code's plain language demonstrated that a particular statutory provision dealing with the spouse's elective share, section 15-11-202(1), C.R.S. (2014), fixed the value of the property comprising the augmented estate on the decedent's date of death. This specific provision controlled over the general equitable authority the probate court may exercise under section 15-10-103, C.R.S. (2014).Accordingly, the probate court erred by linking its equitable award to appreciation and income to the entire augmented estate. Nevertheless, section 15-10-103 expressly reserved the probate court's equitable authority to the extent that it was not displaced by a specific statutory provision. "On remand, the probate court has tools at its disposal to exercise equity consistent with the statutory elective-share framework." The Court set aside the court of appeals' judgment requiring the spouse to repay the entire $24.5 million equitable award with interest. The probate court's mandate on remand was to determine what equitable relief was available to the spouse under the specific facts of this case. View "Beren v. Beren" on Justia Law

As surviving spouse of Frank Mattern, Jeanette Mattern appealed a district court judgment dividing the couple's marital homestead into three individual apartments and ordering Jeanette Mattern to pay rent retroactively and in the future while she lived in the homestead. Under the specific facts of this case, the Supreme Court affirmed the portion of the district court judgment granting Jeanette Mattern a homestead in the second-floor residence of the property, but reversed the portion of the judgment ordering her to pay rent for residing there. "If property claimed as a homestead exceeds the value of the homestead exemption, the homestead must be set off in such form as to exclude the excess, unless the homestead cannot be divided without material harm. If the homestead cannot be divided without material injury, the family home must be preserved intact as against heirs even though the homestead exceeds the homestead exemption amount." View "Mattern v. Frank J. Mattern Estate" on Justia Law

Greg Grengs appeals from district court orders interpreting Anita Grengs' will and approving the final accounting and distribution of Anita Grengs' estate. After review of the specific facts of this case, the Supreme Court held that an option to purchase provision of the will was ambiguous and evidence indicated Anita Grengs intended Greg Grengs to have an option to purchase property that was not conditioned on the landowner's willingness to sell, and the evidence supported the district court's interpretation of the option to lease provision of the will. The district court's contrary ruling was reversed and the case remanded for further proceedings. View "Estate of Grengs" on Justia Law

A number of civil disputes arose from the discovery that a probate clerk had looted millions of dollars from the estates of Bexar County residents who had died intestate. The case involved an intestate estate defrauded of more than half a million dollars. More than a decade after the estate’s administration had closed, and more than three years after learning that the rogue clerk had misappropriated funds from the estates, the intestate’s heirs petitioned by equitable bill of review to re-open the estate, alleging that the estate administrator breached fiduciary duties and fraudulently concealed information about the estate’s assets. The probate court granted the equitable bill of review and set aside the orders closing probate. Thereafter, the heirs successfully litigated their claims against the administrator and were awarded damages against the administrator and his surety. The court of appeals affirmed. The Supreme Court reversed, holding that the heirs’ bill of review was untimely because it was filed more than two years after they received information that would cause a reasonably prudent person to make inquiry, which, if pursued, would lead to the discovery of the concealed cause of action. View "Valdez v. Bernard" on Justia Law

Ellen Panec died after being injured in a motor vehicle accident. Ellen’s husband, William, was appointed the personal representative of her estate. The majority of Ellen’s estate passed to her daughter, Rebecca Griffin, as the remainder beneficiary. A lawsuit was filed against the driver of the other vehicle. William also made a claim against his and Ellen’s underinsurance carrier. Both the driver’s liability insurer and the underinsurance carrier offered to settle the claims. After a hearing, the county court approved the settlements and distributed the majority of the settlement proceeds to William. Although the proceeds flowed from both a survival claim and a wrongful death claim, the county court applied Neb. Rev. Stat. 30-810 - the wrongful death statute - to govern all distributions. The Supreme Court reversed and remanded to the county court with directions to allocate the settlement proceeds between the wrongful death and survival claims, to direct distribution of the wrongful death settlement proceeds, and to direct distribution of the survival claim proceeds to Griffin as the sole beneficiary of Ellen’s residuary probate estate, holding that because the proceeds included the settlement of the survival claim, the proceeds for the survival claim were wrongly distributed in accordance with section 30-810. View "In re Estate of Panec" on Justia Law

Neil Bartelson appealed an order denying his petition to remove Guardian and Protective Services ("GAPS") as personal representative of Ralph Bartelson's estate and to appoint him as successor personal representative. Ralph Bartelson had four children: Neil Bartelson, Diane Fischer, Jean Valer, and Jane Haught. Because of Ralph Bartelson's declining health, the children agreed Ralph Bartelson would reside with Valer and she and Haught would receive compensation for the care they provided. While living under the care of Valer, Ralph Bartelson gave her a power of attorney and established a joint checking account, naming both Valer and Haught co-owners with rights of survivorship and allowing them to issue checks from the account. Alleging Valer and Haught had misappropriated funds, Neil Bartelson and Fischer petitioned for the appointment of Neil Bartelson as Ralph Bartelson's guardian and conservator. In July 2008, the parties stipulated that Valer would act as guardian with limitations and GAPS would be appointed conservator and be responsible for investigating the alleged misappropriation of funds. The parties remained unable to reach a settlement in regard to the misappropriation allegations, and as a result a bench trial was held. Following trial, the district court entered an order disclaiming jurisdiction over the misappropriation that allegedly occurred prior to Ralph Bartelson's death. Neil Bartelson and Fischer appealed. On remand, Neil Bartelson and Fischer argued they had standing to bring a misappropriation claim against Valer and Haught and the district court was required to apply the presumption of undue influence. The district court, however, held Neil Bartelson and Fischer did not have independent standing to assert misappropriation claims against Valer and Haught when they did not allege that GAPS breached its fiduciary duty by failing to pursue such claims against Valer and Haught. After unsuccessfully petitioning for reconsideration, Neil Bartelson then petitioned to remove GAPS as personal representative and to be appointed as successor personal representative, arguing GAPS breached its fiduciary duty by failing to pursue the collection of assets belonging to the estate and by failing to bring an action against Valer and Haught for misappropriation. The district court denied the petition, holding Neil Bartelson was not an interested person and therefore lacked standing to petition for removal of the personal representative. The court also stated it had previously determined GAPS was qualified to act as the personal representative and competently performed its responsibilities. Because the district court failed to apply the presumption of undue influence and incorrectly presumed there can be no undue influence if the principal is lucid, the Supreme Court reversed and remanded. View "Estate of Bartelson" on Justia Law

Malcolm and French Wallop created an estate plan with the intention of owning and operating the Canyon Ranch and establishing a means of transferring its ownership and operation to their respective children. The estate plan led to the formation of the Wallop Family Limited Partnership (WFLP), which owned and operated the Canyon Ranch. Malcolm and French also formed Wallop Canyon Ranch, LLC (WCR) to serve as the general partner of the WFLP. Scott Goodwyn, individually, as a limited member in the WFLP and derivatively on behalf of the WFLP, sued Malcolm Wallop, WCR, the WFLP, and other Wallop family members, alleging breaches in the ownership, operation, and management of the WFLP. The district court (1) found generally in favor of Goodwyn on his claims relating to gifts made to him and other limited partners; (2) found generally against Goodwyn on his claims of breach of fiduciary duties by certain defendants; and (3) determined that the gifting issues upon which Goodwyn prevailed were derivative claims and that Goodwyn was entitled to reasonable attorney’s fees relating to the derivative claims. The Supreme Court affirmed, holding that the district court did not err in (1) awarding attorney’s fees; and (2) denying Goodwyn’s claims of breach of fiduciary duties by certain defendants. View "Goodwyn v. Wallop" on Justia Law

Eastchester Rehabilitation & Health Care Center cared for Edna Shannon for four years. During the fourth year, Family Service Society of Yonkers (FSS Yonkers) was appointed as guardian of Shannon’s person and property. Eastchester later made a claim with FSS Yonkers seeking compensation for services it rendered to Shannon that were not covered by Medicaid. Thereafter, Westchester County Department of Social Services (DSS) advised FSS Yonkers that Shannon was indebted to DSS for medical assistance paid on her behalf. After Shannon died, FSS Yonkers commenced this proceeding to settle its final account and seeking a determination as to how it should disburse Shannon’s remaining property. Supreme Court held that the balance of Shannon’s remaining property should be paid to DSS. The Appellate Division reversed. The Supreme Court reversed, holding (1) N.Y. Ment. Hyg. Law 81.44 does not permit a guardian to retain property of an incapacitated person after the incapacitated person has died for the purpose of paying a claim against the incapacitated person that arose before that person’s death; and (2) inasmuch as Eastchester’s claim for medical services rendered to Shannon was unrelated to the administration of her guardianship, section 81.44 does not allow FSS Yonkers to withhold from Shannon’s estate funds to pay Shannon’s debt to Eastchester. View "In re Shannon" on Justia Law

In 2010, Nancy Powell-Ferri (Nancy) filed an action, which was still pending at the time of the present action, for dissolution of her marriage to Paul John Ferri (Paul). After Plaintiffs, the trustees of a 1983 trust created by Paul’s father for the sole benefit of Paul, transferred a substantial portion of the assets in the 1983 trust to a 2011 trust created by Plaintiffs, Plaintiffs instituted this declaratory judgment action seeking a ruling that they had validly exercised their authority in transferring the assets and that Nancy had no interest in the trust assets. Nancy filed a cross complaint alleging that Paul had breached his duty to preserve marital assets during the pendency of the marital dissolution action by failing to take affirmative steps to contest the decanting of certain assets from the trust. The trial court granted summary judgment for Paul, concluding that Nancy failed to state a cause of action. The Supreme Court affirmed, holding that the State does not require a party to a dissolution action to take affirmative steps to recover marital assets taken by a third party without a finding of dissipation. View "Ferri v. Powell-Ferri" on Justia Law